In his first State of the Nation Address on 21 April 2015, President Geingob said the following about the direction of hitherto State Owned Enterprises (SOEs) in the country’s national economy: “Whilst efforts to transform the production structure of the economy and making the economy more competitive will continue to be pursued, we shall also raise the bar regarding transformation of ownership structures. To redress imbalances of the past, we have adopted the model of a pro development state. In other words, the State will play a more active role in the economy. This is not to compete with the private sector but to acknowledge that the “invisible hand” of the market does not always work as it should. Therefore, restriction of ownership over our natural resources will also be explored and enforced. I will also direct that the Procurement Bill be brought back to Parliament as soon as possible. This Bill should deliberately favour local business especially the previously disadvantaged. Equally, the completion of the Retail Charter should be fast-tracked and finalized before the end of 2015. It is unacceptable that, a quarter century after independence, locally produced goods are denied shelf space in retail outlets.”
On the day of his inauguration as the Third President of the Republic just a month earlier, Geingob created the new Ministry for Public Enterprises. The new President’s action came as no surprise, as there has been a growing disenchantment with the existing model of creating, funding and governing the SOE sector thus far. It is hoped that the new dispensation will bring about a better synergy and synchronicity between the goals of the state and the behavior and operations of entities created and funded by the state. The importance of a comprehensive and ongoing reorganization of state owned financial institutions in the country was and remains necessitated by, among other reasons, the following:
•the haphazard colonial and apartheid economic planning;
• the existence of a multiplicity of organizations, financial and semi-financial in the country with no clear national agenda with a central philosophy;
• the existence of a culture of piecemeal and uncoordinated creations of costly organizations across all spheres of government;
• the emergence of a new long term vision for the state and the need for alignment with local and international actors;
• the recognition of rapid sweep of technological modernization and changes with which all societies and economies must keep pace;
• the need for a new paradigm and to move in tandem with new mandates and legislation;
• the need for the country to respond decisively to future challenges such as food security, water, energy sustainability, telecoms, financial markets; and,
• the wisdom to respond to ever changing and dynamic global social, economic and political imperatives;
• the new realization that the model of governing the over 80 state owned enterprises in existence was not the most suitable to address the myriad of challenges in the sector;
• the need to re-conceptualize a new and most appropriate ownership model for a better synergy to guide the futures of these entities;
• the necessity to relook the classification, capitalization and concomitant paying models for these entities’ leaderships;
• the need to synchronize economic development with ongoing legal reform; and,
• the imperative to keep strategic planning abreast with the fast changing world of which Namibia is a part.
The political leadership of the country is of the view that the organizations that have been known as public enterprises must continue to play an important economic role in the pursuit of developmental objectives of the state. As it has been the case before, these organizations are expected in the main to augment the business of the state in the following broad areas along the trajectory of sustainable national economic development: (a) employment creation; (b) wealth distribution, (c) poverty alleviation, and (d) the integration of the Namibian economy into that of the region, the continent and the world.
The backdrop of this philosophic orientation is appreciation that the political freedom that was won 25 years ago faces peril unless it is accompanied by a growing measure of economic freedom for a critical number of citizens who stand to lose if democratic gains are not buttressed by economic prosperity for an expanding number of voting stakeholders.
The current public enterprises sector in Namibia comprises: (a) economic and productive or commercial enterprises; (b) regulatory enterprises; (c) services rendering enterprises; and (c) the others who are neither here nor there. These state created/funded enterprises are expected to assist the state in the elaboration of a national philosophy that is anchored on the pillars of the fundamental and non-negotiable values of the Namibian state, namely, peace, stability, security, freedom, justice, unity, equality and harmony in and of the Namibian Nation. Towards these noble ends, these financial and service rendering entities are expected to be arms of the state in the provision of a modern infrastructure to support the nation’s economy to grow from strength to strength in the context of a developmental state. Based upon their respective mandates and remits public enterprises are expected to possess a targeted approach towards job creation, economic infrastructural growth and economic competitiveness in the SADC region, and when/where possible, beyond.
Part of the new administration’s mindset is a sound appreciation that Namibia has done quite well since independence and whatever must happen going forward has to be in the context of improving on what exists and making matters better and more meaningful for the majority of the population.
The Namibian economy has enjoyed a period of sustained growth in the last 25 years, due to a number of factors, among others sound fiscal and monetary policies, capital inflows, government infrastructural development, a deliberate policy of national reconciliation, the process democratization of the political pace from conflict to cooperation and an ongoing and unapologetic appreciation that Namibia is a child of international solidarity. Our development strategies must therefore respond not only to our domestic issues but to the international developments and influence some of these developments where we can and must.
These public institutions are vital stakeholders in nation-building and development as part of their intrinsic mandate. They are expected to hone in some productive capabilities that are required in the ever-evolving global economies. These entities allocate investment in plans, skills and technologies to build the productive base and drive processes to enhance the productivity of available economic assets. The reorganization of these public institutions in the current and future conjuncture is informed by the objectives of a developmental state – that is where the government is the key mover of development. It is in this context that a new dispensation with firm policies will be shaped to guide the conditions under which government will allocate capital resources to commercial enterprises such that they are functional and their activities remain in tandem with the national philosophy towards Grand Vision 2030. These conditions will also guide which enterprises are be targeted for what scale of investment and what forms of governance rights to be attached to such investments. These investments can be made either directly from the fiscus, which means that the state will directly own the enterprise, or through development finance intermediaries, depending on government’s intent on making the investments. Minister Leon Jooste for Public Enterprises is rather clear that there is no single consideration or simplistic framework of issues to dictate the direction that will be followed, but remains confident that through the process of consultation which has already started and a common commitment to the country’s national interests, the future can only be better than the past.
The Government deserves all support in this difficult but deliberate nation-building process. As it is the case with any serious restructuring, there are inevitable advantages and disadvantages, opportunities and risks, and even casualties along the way. What is required across the board is the recognition that public enterprises are powerful instruments of development and a robust governance process could only make matters better for all.
During a most worthwhile workshop convened by Johannes !Gawaxab at NIPAM, the feeling amongst the main players in the public enterprises sector was palpable and longing for change. As a think tank and do-tank of Government, NIPAM is poised to respond in conversations with other stakeholders to provide the platform for capacity building interventions in the public service and public enterprises. In collaboration with the Ministry of Public Enterprises and reputable Namibian experts on corporate governance such as Mr !Gawaxab, NIPAM will offer training to board chairpersons, chief executive officers, company secretaries, ministers and permanent secretaries.
NIPAM already spearheads the soon to be launched SOE Chief Executive Officers’ Forum that will serve as a platform for chief executives in taking the prosperity message forward.